MA condo conversion

[Sean Doherty]

I had my duplex appraised today for a refinance and the appraiser was asking why I haven't done a condo conversion yet. I've heard the term condo conversion but i don't know anything about it. What are the benefits, the costs, and the process? I bought it for 450k last July and she said if I was to do a conversion each side would appraise for at least 300k. So does that mean there's 150k of value I can tap into somehow? My ultimate goal is financial freedom through rental property. The duplex is in Mass and I live in one side. 

She also mentioned that if I do the conversion I may be able to put the two small lots attached to the back of my duplex lot to use because I might be able to bypass some restrictions. I need to look into that more but I'm just looking for some general info on how to analyze doing a condo conversion vs keeping it as a duplex and how it could fit into my long term goals 

[Joseph Cacciapaglia]

I'm a big fan of condo converting small multifamily properties. It's really just a matter of paperwork that your attorney does. The process may be different in MA than in TX, but in general you're just dividing your property into two units that you can legally sell. In TX, you would need to form a condo association, but again that's just paperwork. There are attorneys that specialize in that type of conversion, so don't just go to any old firm. I know here the whole process could cost you under $10K. 

Properties aren't always worth more as condos than as a whole property, but it is often the case. I've worked with people in the past that their entire business model was based on buying small multifamily properties, and then selling them off as condos over time. If your appraiser was correct, it sounds like it's worth looking into.